1.5 Stakeholders in a Business

2026 Syllabus Objectives

By the end of this topic, you should be able to explain:

  1. What individuals or groups with an interest in the activities of a business are
  2. The difference between internal stakeholders and external stakeholders
  3. The roles, rights, and responsibilities of stakeholders
  4. The impact of business decisions on stakeholders, and how stakeholders react
  5. The impact of stakeholder aims on business decisions
  6. How and why a business needs to be accountable to its stakeholders
  7. How conflict might arise from stakeholders having different aims and objectives
  8. How changing business objectives might affect stakeholders

1. What Is a Stakeholder?

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A stakeholder is any person, group, or organisation that has an interest in — or is affected by — the activities and decisions of a business.

Think of it this way: when a business makes a decision (for example, cutting jobs or raising prices), it does not only affect the business itself. Many people on the outside — and the inside — are affected too. All of these people are stakeholders.

A business needs to consider the needs and interests of its stakeholders in order to run successfully in the long term. If a business ignores its stakeholders, those stakeholders can cause serious problems for the business (more on this later).

Key point: Not all stakeholders want the same things. Different stakeholder groups have different priorities, which can sometimes lead to disagreements and conflict.

2. Internal Stakeholders vs External Stakeholders

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Stakeholders are divided into two broad groups: internal and external.

Internal Stakeholders

An internal stakeholder is someone who is directly involved inside the organisation. They work within the business and are affected by its day-to-day operations and decisions.

The three main internal stakeholders are:

  • Owners (including shareholders in larger companies)
  • Employees
  • Managers and Directors

External Stakeholders

An external stakeholder is a person or group outside the business who is affected by — or has an interest in — what the business does.

The main external stakeholders are:

  • Customers
  • Suppliers
  • Creditors (people or banks that lend money to the business)
  • Local community
  • Government
  • Pressure groups (organisations that campaign to change business or government behaviour)
  • Competitors

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